· Asia’s base oils demand likely to stay mixed, with weak demand in China, steady demand in southeast Asia and firm demand in India.· China’s major lubricant blenders raise finished-lube prices from late-Sep through to mid-Oct 2023.· Move incentivized end-users to bring forward procurement plans ahead of week-long public holiday in China at start of October.· Any such move could have left blenders with more depleted stocks ahead of public holiday.· Any such move could trigger brief rise in demand after the public holiday as blenders maintain preference to maintain lower stocks and procure on need-to basis.· Domestic blenders’ cautious procurement compounds impact of rising domestic base oils supply.· Combination of weak demand and rising supply adds to blenders’ reluctance to build larger stocks and complicates sellers’ ability to implement or maintain higher prices..· China’s August base oils demand falls to eight-month low..· Weaker demand curbs refiners’ leverage to raise prices that face growing pressure from rising feedstock and diesel prices.· Demand weakness shows signs of extending into Q4 2023 even with seasonal pick-up in consumption.· Trend incentivizes refiners to extend shutdowns or cut run-rates.· Trend incentivizes overseas refiners to target other markets instead..· China’s August base oils exports rise to one-year high, even with low domestic base oils production..· Persistent surplus volumes for export highlight weakness of China’s domestic demand.· China’s September exports show signs of falling ahead of seasonal pick-up in demand at end-Q3 2023..· Singapore’s August base oils exports to southeast Asia outpace shipments to China and India combined for a fourth month..· Exports had rarely exceeded flows to China and India before 2022.· Trend highlights growing demand in southeast Asia and Singapore’s leveraging on that growth.· Trend reduces Singapore’s exposure to weaker Chinese demand and to the prospect of rise in domestic supply in India..· Vietnam’s August base oils imports hold firmer, rise year-on-year for third time in four months..· Improving import volumes add to signs of firmer lube demand in southeast Asian markets like Vietnam, after slowdown earlier in year.· Firmer demand boosts attraction of targeting southeast Asia with more base oils supplies..· Thailand’s lower August base oils exports, drop in shipments to China and Singapore, and rise in shipments to Mideast Gulf, points to more mixed demand in Asia-Pacific region..· India’s base oils demand for overseas supplies likely to hold firm on tighter domestic supplies, seasonal pick-up in consumption.· India’s base oils prices lag surge in US export prices, ICIS data shows.· Trend suggests supply in Asia and Mideast Gulf is sufficient to meet demand.· India’s very-light-grade base oil price discount to domestic retail prices narrows sharply.· Trend could curb interest in importing additional supplies of very-light grade base oils..Global base oils - week of Oct 2: Price outlook - margins
· Asia’s base oils demand likely to stay mixed, with weak demand in China, steady demand in southeast Asia and firm demand in India.· China’s major lubricant blenders raise finished-lube prices from late-Sep through to mid-Oct 2023.· Move incentivized end-users to bring forward procurement plans ahead of week-long public holiday in China at start of October.· Any such move could have left blenders with more depleted stocks ahead of public holiday.· Any such move could trigger brief rise in demand after the public holiday as blenders maintain preference to maintain lower stocks and procure on need-to basis.· Domestic blenders’ cautious procurement compounds impact of rising domestic base oils supply.· Combination of weak demand and rising supply adds to blenders’ reluctance to build larger stocks and complicates sellers’ ability to implement or maintain higher prices..· China’s August base oils demand falls to eight-month low..· Weaker demand curbs refiners’ leverage to raise prices that face growing pressure from rising feedstock and diesel prices.· Demand weakness shows signs of extending into Q4 2023 even with seasonal pick-up in consumption.· Trend incentivizes refiners to extend shutdowns or cut run-rates.· Trend incentivizes overseas refiners to target other markets instead..· China’s August base oils exports rise to one-year high, even with low domestic base oils production..· Persistent surplus volumes for export highlight weakness of China’s domestic demand.· China’s September exports show signs of falling ahead of seasonal pick-up in demand at end-Q3 2023..· Singapore’s August base oils exports to southeast Asia outpace shipments to China and India combined for a fourth month..· Exports had rarely exceeded flows to China and India before 2022.· Trend highlights growing demand in southeast Asia and Singapore’s leveraging on that growth.· Trend reduces Singapore’s exposure to weaker Chinese demand and to the prospect of rise in domestic supply in India..· Vietnam’s August base oils imports hold firmer, rise year-on-year for third time in four months..· Improving import volumes add to signs of firmer lube demand in southeast Asian markets like Vietnam, after slowdown earlier in year.· Firmer demand boosts attraction of targeting southeast Asia with more base oils supplies..· Thailand’s lower August base oils exports, drop in shipments to China and Singapore, and rise in shipments to Mideast Gulf, points to more mixed demand in Asia-Pacific region..· India’s base oils demand for overseas supplies likely to hold firm on tighter domestic supplies, seasonal pick-up in consumption.· India’s base oils prices lag surge in US export prices, ICIS data shows.· Trend suggests supply in Asia and Mideast Gulf is sufficient to meet demand.· India’s very-light-grade base oil price discount to domestic retail prices narrows sharply.· Trend could curb interest in importing additional supplies of very-light grade base oils..Global base oils - week of Oct 2: Price outlook - margins
